The decision comes as a setback to the Buddhadeb Bhattacharjee government which suffered a major embarrassment following violent protests over land acquisition at Singur, from where Tata pulled out its Nano project, and Nandigram.
The government had formed a five-member committee on 4th September to look into the allegations of irregularities in land acquisition for the IT hub after the arrest of one of the directors of a joint sector company formed for setting up the project.
R K Modi, also one of the owners of Vedic Village luxury resort, was charged with forcible land acquisition and keeping illegal arms in his resort on the outskirts of the city. The government said that departments like Housing, Land and Land Reforms, Urban Development and PWD were in favour of scrapping the project.
"It is impossible for the IT department to proceed with the project if any of these departments refused to facilitate," an IT department release said. "The government does not want to be involved in any illegal activity. As such the IT department cannot proceed with the project," it said.
According to one estimate, the state will lose out on Rs 10,000 crore of potential investment and three lakh jobs due to the scrapping of the IT township, a pet project of the Chief Minister